InformationWeek
Defining The Business Value Of Technology
June 21, 1999
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Sometimes such development options aren't possible. Most extranet systems, for instance, will require that the entire session be encrypted. Doing so can drop transaction serving from hundreds of transactions per second straight into single digits.
The days of companies connecting directly to Internet hubs are over because that process is too expensive and doesn't provide adequate service levels. Network access points or metropolitan area exchanges work for some, but since they are managed by many discrete government, business, and academic institutions, they don't offer the constant service large companies need.
Guaranteed network availability has become so critical for success, sites such as Barnesandnoble.com can't afford any downtime. That's why King opted for collocation. But such a system may seem expensive to other network managers. King says the cost isn't prohibitive because he has negotiated service-level agreements in which he pays only for bandwidth used. While specific service-level details are entirely negotiable, a typical collocated server, combined with round-the-clock management and T3 Internet access, might start at $35,000 a month.
Though legacy migration carries many challenges, Web-only companies also face problems--not the least of which is a lack of money. Often, a combination of hosting and in-house infrastructure yields the most effective overall E-commerce strategy. Giftpoint.com, an electronic gift-certificate clearinghouse, takes that approach.
"We were founded in August 1998 and had to be up and running by November," says Mark Carson, director of Web development. "Our biggest challenge was the initial process of rounding up the right software and hardware, and getting the initial network in place," he says. Until then, Giftpoint.com could not start development or site testing. Choosing a robust hosting service helped Carson get Giftpoint.com off the ground quickly.
Giftpoint.com is launching an E-gift-certificate product that requires merchant clients to use Giftpoint.com to E-mail gift certificates. That changes not only Carson's front-end requirements, but his back-end and client connections as well. He's had to create back-end interfaces that generate a certificate ID and deliver it to the customer and the merchant's accounting software. The effort is so time-consuming, Carson's staff is not equipped to handle it and also manage an E-business infrastructure at the same time.
Giftpoint.com decided to host and collocate its equipment at Frontier Internet, an Internet service provider. Giftpoint.com can access the Frontier servers for development tasks via a fractional T1 line.
With ISPs and backbone providers engaging in a price and service war for merchant and business customers, IT managers should take a closer look at the wide range of offerings. Once those offerings are sorted out, IT managers may not panic as much when the next E-business initiative rolls around.
Oliver Rist is a freelance writer and a contributing technical editor at InternetWeek. He can be reached at orist@cmp.com.
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